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had consumed unpaid fuel, and no money had traded hands. Both OWB's assignee, and the subcontractor which had physically delivered the bunker were pressing the ship's owners for payment. To whom, if anyone, was payment due? Payment was due to OWB by contract, but the subcontractor claimed that the
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The particular factors of this extraordinary case were these: OW Bunker (OWB) was an intermediary supplier of bunkers to ships. In many cases, it subcontracted this to other wholesale suppliers, obtaining fuel from them on credit. OWB did not require its customers to make immediate payment for
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The effect of this was that although the ships which had consumed the fuel may have paid for them, after OWB's insolvency, such ships were then liable to pay a second time to the original supplier, since property in the goods had not passed to the "buyer".
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The result was that hundreds of shipowners who were impacted by the bankruptcy were declared doubly liable for the fuel cost. This resulted in considerable rewriting of bunker supply contracts, in case another a similar insolvency occurred.
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or trans-shipped. It was noted that, despite being a bailment, the bunkers could be consumed, since bailment requires the goods to be cared for and returned, and that consuming the bunkers destroyed the goods and was thus a
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Sale of Goods Act 1979 s.2(1): "A contract of sale of goods is a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price.".
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whereby the "seller" (actually, bailor) granted lawful possession to the "buyer" (actually, bailee), with the right ONLY to use the bunkers for ship propulsion. The bunkers could not be sold, mixed,
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in less than a year. The dramatic collapse of the company led to expedited litigation in the
English courts (as all the contracts had been declared to be "subject to English Law").
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transferring property (i.e. ownership) in the goods to the consumer. Thus, although it seemed that the ship had "bought" the bunkers from the seller, nevertheless because of the "
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Ship & Bunker, "OW Bunker: How One of the World's
Largest Marine Fuel Traders Went From IPO to Bankruptcy - Part 1, Founding to IPO". Retrieved 26 October 2015.
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a sale of goods, the bunkers were still their property, and they were entitled to be paid by the ship if OWB was not able to pay on the ship's behalf.
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The legal question was: "was the agreement to supply bunkers a 'contract of sale of goods' within the meaning of s.2(1) of the
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164:. It was the world's largest bunker supplier until its collapse on 7 November 2014. It went from
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356:"In a Nutshell: What is the "Res Cogitans" OW Bunker UK Test Case and Why is it Important"
237:" (a retained right of title provision), the "transaction" was not a "sale" but instead a
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276:"OW Bunker declares bankruptcy throwing global marine fuel supply into question"
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Commercial
Maritime Law Conference paper: "The Res Cogitans" by Stephen Cogley
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bunker, but instead allowed the ships to pay for bunker after it was consumed.
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391:"UK court ruling in OW Bunker case may mean double payments for shippers"
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183:The case was given priority, progressing from an
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229:arrangement to permit to consumption of bunkers
222:(as amended)?"; to which the answer was "No!".
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199:in the record time of only ten months.
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389:Khasawneh, Roslan (11 May 2016).
20:law case. For the thinking man's
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225:Instead, it was a special
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393:. Reuters. Archived from
326:Supreme Court case report
176:OW Bunker test case: the
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430:Steamship Mutual report
166:initial public offering
220:Sale of Goods Act 1979
280:www.parisguardian.com
211:supply of bunker was
408:The Baltic Briefing
139:Number of employees
71:Marine Fuel Traders
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397:on April 22, 2018.
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360:Ship & Bunker
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362:. 24 March 2016
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287:. Retrieved
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187:through the
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160:in northern
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110:Headquarters
44:aktieselskab
37:Company type
22:res cogitans
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289:10 November
185:arbitration
158:Nørresundby
154:marine fuel
129:Area served
115:Nørresundby
419:HFW report
366:2018-04-21
262:References
170:bankruptcy
168:(IPO) to
143:622 (2013)
104:Bankruptcy
87:Ove Wrists
150:OW Bunker
133:Worldwide
52:Traded as
442:Category
248:tortious
239:bailment
191:and the
84:Founders
68:Industry
243:pledged
231:without
227:one-off
195:to the
162:Denmark
121:Denmark
92:Defunct
76:Founded
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24:, see
250:act.
291:2014
100:Fate
79:1980
340:UCL
213:not
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344:QC
332:^
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62:OW
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